Here's Why The Unemployment Rate Dropped Even Though We Lost Jobs

Employment To Population

There were some positive signs in today’s jobs report–and they weren’t just some definitional b.s. pumped out by the Bureau of labour Statistics.

Calculated Risk explains:

A common question is: how could there be fewer payroll jobs, but the unemployment rate declined? This is because the data comes from two separate surveys. The unemployment Rate comes from the Current Population Survey (CPS: commonly called the household survey), a monthly survey of about 60,000 households.

The jobs number comes from Current Employment Statistics (CES: payroll survey), a sample of approximately 400,000 business establishments nationwide.

The establishment survey showed a loss of 20,000 payroll jobs in January, but the household survey showed an increase in the employment level of 541,000. The number to use for jobs is the establishment survey, but the unemployment number is based on the household survey and the surveys can diverge over the short period, but over time this will work out (for more on the differences, see: Jobs and the Unemployment Rate).

Read more and check out all the latest jobs charts at Calculated Risk >

Chart: Employment to population, from Calculated Risk.

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